Monday, February 25, 2019

How to Pay Off Loans Fast: 4 Loan Repayment Tips That Work

It’s common for people to feel paralyzed by their debt - it feels seemingly impossible to pay off. It’s a gray cloud that looms above us until we can take care of it. With the four loan repayment tips we share below, you can shrink your debt and make it disappear in no time. If you want to learn more about how to pay off loans fast, keep reading.

Find Your Motivation and Stick with It

If you have a purpose fueling you, you’ll feel motivated to keep going. Are you doing this for your family? Are you doing this to make room for other financial goals, such as the ability to finance a car, a home, or a wedding? Keep these motivators at the forefront of your mind as you make payments. Giving up your money to debt might feel painful, but in the words of Dave Ramsey, you have to “live like no one else now so you can live like no one else later.” To avoid temptations, we recommend automating your payments, so you can fully commit to this process. When you do this, you also dodge late fees because you’ll always be on time.

If You Can, Pay Off More Than the Minimum

Putting down more money than the required minimum amount will put you in a much better place down the line. Did you receive a bonus, monetary gift, or tax refund? Apply it to your loan. Every little bit helps—even if you pay $50 more on your principal, it’ll make a big impact in the long run. If you’d like, you can also make bi-weekly payments. Either strategy allows you to fight off interest and reduce what you owe.

Live Below Your Means

The formula for living below your means is simple: spend less than what you make. You’re in total control of your money; assign a purpose to each of your dollars - you should know exactly where your money goes. By doing so, you may be able to set aside more money to get out of debt. For instance, instead of eating out, you can cook on a budget. Additionally, you can cut out subscriptions you never use. Essentially, you want to live comfortably - not over-the-top.

If you see signs of overspending, take care of them right away. To break bad habits and avoid spending above your means, limit your credit card use.

Start a Side Hustle

Sometimes, you can only put so much money toward your debt. Thus, another way to tackle debt is to increase your income. Think about your interests and use your skills to take on extra work. For example, you can sell clothes or offer web design services. You don’t have to take a second job full-time - you can easily make it an effective short-term solution.

We hope our loan repayment tips help you tackle your debt. There are numerous benefits to paying off loans early, including less interest - and less time that you need to worry about the debt hanging over your head.